The developing world is expected to receive $414 billion in migrant remittances in 2013, an increase of 6.3 percent over the previous year. This is projected to rise to $540 billion by 2016.
India and China alone will represent nearly a third of total remittances to the developing world this year. In India, remittances are larger than the country’s earnings from IT exports.
Globally, the world’s 232 million international migrants are expected to remit earnings worth $550 billion this year, and over $700 billion by 2016, says the latest issue of the World Bank’s Migration and Development Brief.
The Brief also highlights that the high cost of sending money through official channels continues to be an obstacle to the utilization of remittances for development purposes, as people seek out informal channels as their preferred means for sending money home. The global average cost for sending remittances is 9 percent, broadly unchanged from 2012.
While remittance costs seem to have stabilized, banks in many countries have begun imposing additional ‘lifting’ fees on incoming transfers. Such fees can be as high as 5 percent of the transaction value.
Some international banks are also closing down the accounts of money transfer operators because of money laundering and terrorism financing concerns.
The Brief also points to need for reducing the high cost of migration, including recruitment costs and fees for visas, passports and residency permits.